My department seriously discussed making our own textbooks for at least one class. The idea never got off the ground, although I think it was a good idea. Part of the reason really is that there were no incentives for doing so, no real teaching or research credit, no grant dollars brought it, etc. The other end of it too was that there was a lot of pressure to turn it into a profit-making venture. Rather than it be open-source, for example, to keep the money in-house with the idea that it would lower costs for students and keep the money in the department instead of a publisher.

So, good idea but too much pressure on departments to be bringing in indirect grant funds, and not enough incentive to release it openly. I think some people in some places can get away with it, but not everywhere.